A Sustainable Business Network Model for Southern Africa

The relevance of the Southern African Development Community (SADC) regional integration process emanates in part from the view that there is a trade-off between regional integration and integration with the global economic system. Whilst integration with the global economy could provide the impetus for economic growth, regional integration could provide the required protection from the ills of globalization. This argument is based upon the belief system that regionalism could be used as an instrument to create a new equilibrium that balances the protection of the vulnerable and the interests of the particular population living in that environment against the integrative, technological dynamics associated with globalization.

In this regard the SADC can typically be classified as a vulnerable region as it is dealing with a marriage of third and first world realities characterized by the existence of cultural colonialism accompanied with perceptions of higher and lower cultures, severely distorted levels of inequality, destructive development policies, extreme poverty and demands for immediate relief for the sake of survival.

The Problem Statement

If Southern Africa intends to succeed, a new look is required of the region’s social capital capabilities using fresh and creative business strategies, which will build on mutual foundations of trust. This implies amongst others a need to develop strong partnerships between all the stakeholder groups that can be unified into a strong wish power supported by a congruent business approach.

The Proposed Business Network Solution

The new business development strategy in Southern Africa should emphasize the endogenous business sector, of which the informal small business sector is the most important factor. It is estimated that the majority of Southern Africa’s working population operates in the informal economic sector without legislation, insurance, employee protection or rules. It is therefore important to integrate the informal small businesses into the formal economic sector as it may serve as the springboard to effective enterprise development in the SADC.

The second step is to ensure that all small businesses are well embedded in open business network relationships in order to enable them to search and obtain resources that they do not possess. By doing this an opportunity-driven approach is adopted that may lead to competitive advantages for businesses for it creates the opportunity to take advantage of the knowledge and problem-solving abilities of all actors belonging to their supply and demand networks directly or indirectly. However, to ensure sustainable business development an epistemic small business community is regarded as a pre-requisite. It requires that the small business community network should share a set of normative and principle-belief system, which provide a value-based rationale for the business and social actions of all the actors. Business framework conditions should also be crafted that could provide a raison d’etre and an agreement of the common purpose that the small business environment pursues.

The outcome of the network implementation process is that every business in essence becomes a networked organization or an extended enterprise positioned to compete in the global market. It is envisaged that the implementation of the network approach should be accompanied by some social interventions, as small business owners in the SADC do not operate in a normal market economy. One option for example is to enter into sub-contracting relationships with large companies to produce sub-components of final products.

Jan Grundling is the Head of the Centre for Entrepreneurship at Tshwane University of Technology, South Africa. He has published extensively in various national and international Journals. He has also contributed more than 45 papers at national and international conferences.

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